United States Government Accountability Office
Report to Congressional Committees
June 2013
DEFENSE
ACQUISITIONS
Goals and Associated
Metrics Needed to
Assess Progress in
Improving Service
Acquisition
GAO-13-634
June 2013
DEFENSE ACQUISITIONS
Goals and Associated Metrics Needed to Assess
Progress in Improving Service Acquisition
Highlights of GAO-13-634, a report to
congressional committees
Why GAO Did This Study
What GAO Found
In fiscal year 2012, DOD obligated
more than $186 billion for contracted
services, making it the federal
government’s largest buyer of services.
GAO’s prior work found that DOD’s
use of contracted services has been
the result of thousands of individual
decisions, not strategic planning
across the department.
Over the last decade, the Department of Defense (DOD) has taken several
actions to address legislative requirements to improve the acquisition and
management of services. In 2001, as amended in 2006, Congress required DOD
to implement a management structure for the acquisition of services. In
response, DOD implemented such a structure and service acquisition review and
approval process. Recently, DOD also established new positions within its
management structure, including senior managers within the office of the Under
Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L))
and the military departments, to oversee and coordinate service acquisition. With
a management structure and review process in place, USD(AT&L) is focusing on
efforts to improve the process for how requirements for individual service
acquisitions are developed and enhancing training to respond to several
legislative directives. USD(AT&L) also created its Acquisition of Services
Functional Integrated Product Team, in part, to determine how to address
legislative requirements to provide training for personnel acquiring services.
USD(AT&L) did not develop a plan to implement the Defense Science Board
recommendations to improve service acquisition but identified 23 different
actions, including its Better Buying Power Initiative, it has planned or taken that
officials regard as addressing what the plan was to include. For example,
USD(AT&L) is updating its guidance on using incentives to improve contractor
performance, which addresses one of the elements that was to be in the plan.
Over the years, Congress has
legislated a number of requirements to
improve DOD’s service acquisitions.
For example, Congress required DOD
to implement a service acquisition
management structure, approval
process, and policies. Congress also
directed DOD to develop a plan to
implement the Defense Science
Board’s recommendations for
improving service acquisition.
The National Defense Authorization
Act for Fiscal Year 2012 mandated that
GAO report on DOD’s actions to
improve service acquisition and
management. GAO examined (1) the
actions DOD has taken to respond to
legislative requirements and (2) how
DOD determines the effects of its
actions to improve service acquisition.
GAO reviewed documentation and
interviewed DOD officials on the
actions taken in response to the
legislative requirements. GAO also
assessed whether DOD addressed key
factors, including establishing goals
and metrics, to help it determine if it
has improved service acquisition.
What GAO Recommends
GAO recommends that DOD establish
baseline data, specific goals for
improving service acquisition, and
associated metrics to assess its
progress. DOD concurred with the
three recommendations.
View GAO-13-634. For more information,
contact Timothy J. DiNapoli at (202) 512-4841
or dinapolit@gao.gov.
While DOD has taken a number of actions that address legislative requirements,
DOD is not yet positioned to determine what effects these actions have had on
improving service acquisition. Specifically, USD(AT&L) has not identified specific
goals and associated metrics that would enable it to assess progress toward
achieving those goals. USD(AT&L) has identified improving service acquisition
as a priority but has not defined a desired end state for its actions or the
measurable characteristics that would embody achieving such a goal. It is
challenged in defining a desired end state for its actions, in part, because it has
not determined the current status of service acquisition in terms of the volume,
type, location, and trends. DOD is taking steps to improve its contract and
financial systems to obtain such data, but these efforts will not be complete until
at least 2014. Further, DOD has not established departmentwide metrics to
assess its progress in improving service acquisition but has acknowledged the
need to do so, which officials described as challenging. Nevertheless, despite the
challenges in doing so, it is not impossible. For example, DOD has agreed to set
goals for the amount of spending managed through strategically sourced
acquisitions, link strategic sourcing to its Better Buying Power Initiative, and
establish metrics, such as utilization rates, to track progress toward these goals.
However, DOD is not fully leveraging the command-level assessments, feedback
from the military departments, and other ongoing efforts it relies on to gauge the
effects of its actions to improve service acquisition. By using its budget and
spending data and leveraging these efforts, DOD could develop baseline data
and identify trends over time, enabling it to develop measurable goals and gain
more insight into whether its actions are improving service acquisition. Until then,
DOD will continue to be in a position where it does not know whether its actions
are sufficient to achieve desired outcomes.
United States Government Accountability Office
Contents
Letter
1
Background
DOD Has Taken Actions to Address Legislative Requirements to
Improve Service Acquisition
DOD Has Not Fully Addressed Key Factors to Determine Whether
Actions Are Improving Service Acquisition
Conclusions
Recommendations for Executive Action
Agency Comments and Our Evalutation
4
14
20
21
22
Appendix I: Department of Defense Actions to Implement Requirements in 10 U.S.C. § 2330
24
Appendix II: Under Secretary of Defense for Acquisition, Technology, and Logistics Actions to
Address Elements in Section 807 of the National Defense
Authorization Act for Fiscal Year 2012
37
Appendix III: Comments from the Department of Defense
47
Appendix IV: GAO Contact and Staff Acknowledgements
49
6
Tables
Table 1: Description of DOD Positions Responsible for Service
Acquisition and Management
Table 2: Summary of DOD’s Service Acquisition Dollar Thresholds
and Approval Authorities
Table 3: Actions Identified by USD(AT&L) and Military
Departments to Address Requirements in 10 U.S.C. § 2330
Table 4: Summary of USD(AT&L)-Identified Actions that Address
Elements of Section 807 of the NDAA for Fiscal Year 2012
Page i
9
26
27
39
GAO-13-634 Defense Acquisitions
Abbreviations
ARRT
Services FIPT
COR
DAU
DAWDF
DPAP
DSB
DOD
FPDS-NG
NDAA
SAW
USD(AT&L)
Acquisition Requirements Roadmap Tool
Acquisition of Services Functional Integrated
Product Team
Contracting Officer’s Representative
Defense Acquisition University
Defense Acquisition Workforce Development Fund
Defense Procurement and Acquisition Policy
Defense Science Board
Department of Defense
Federal Procurement Data System-Next
Generation
National Defense Authorization Act
Services Acquisition Workshop
Under Secretary of Defense for Acquisition,
Technology, and Logistics
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Page ii
GAO-13-634 Defense Acquisitions
441 G St. N.W.
Washington, DC 20548
June 27, 2013
Congressional Committees
Since fiscal year 2000, the Department of Defense’s (DOD) annual
obligations for contracted services have more than doubled when
adjusted for inflation. In fiscal year 2012, DOD reported $186 billion in
obligations for contracted services, making the department the federal
government’s largest buyer of contracted services. DOD buys a wide
range of services, including consulting, administrative, medical, and
information technology, to support its missions. Within DOD, responsibility
for acquiring these services is spread among buying activities within
individual military commands, weapon system program offices, and
functional units on military bases. We previously found the increased use
of contracted services has been the result of thousands of individual
decisions, not strategic planning across the department. 1
Congress has passed a number of measures over the years to improve
DOD’s acquisition and management of contracted services. In 2001,
Congress required the Secretary of Defense to establish a management
structure for the acquisition of services, under section 2330, title 10,
United States Code. 2 As part of the management structure, the Secretary
was to designate officials within the military departments and defense
agencies to be responsible for managing service acquisition within their
respective departments or agencies. The Secretary was also directed to
establish a process for approving individual service acquisitions in
advance of contract award. Congress subsequently amended 10 U.S.C.
§ 2330 in 2006 to require, among other things, that the Under Secretary
of Defense for Acquisition, Technology, and Logistics (USD(AT&L))
develop and maintain policies, procedures, and best practices guidelines
1
GAO, Defense Acquisitions: Further Actions Needed to Address Weaknesses in DOD’s
Management of Professional and Management Support Contracts, GAO-10-39
(Washington, D.C.: Nov. 20, 2009). Over the years, we have made numerous
recommendations to improve DOD’s acquisition of services. Information on these
recommendations and their status is presented later in this report, as appropriate.
2
National Defense Authorization Act for Fiscal Year 2002, Pub. L. No. 107-107, § 801(b)
(2001).
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GAO-13-634 Defense Acquisitions
for acquisition planning, requirements development, and other aspects
involved with the procurement of contracted services. 3
More recently, in section 802 of the National Defense Authorization Act
(NDAA) for Fiscal Year 2010, Congress required USD(AT&L) to have the
Defense Science Board (DSB) independently assess improvements to
DOD’s acquisition and oversight of services. 4 The resulting March 2011
DSB report contained multiple recommendations to improve DOD’s
approach to contracting for services. 5 The DSB’s recommendations
focused on creating new policies and processes, strengthening
management and oversight, designating roles and leadership
responsibilities, and improving the skills and capabilities of personnel
involved in services contracting. Subsequently, as part of section 807 of
the NDAA for Fiscal Year 2012, Congress directed USD(AT&L) to
develop a plan for implementing the recommendations of the DSB to
include, to the extent USD(AT&L) deemed appropriate, eight elements,
most of which align with the DSB’s recommendations. 6 These eight
elements include incentives for high contractor performance, guidance on
the use of appropriate contract types, and training of services acquisition
personnel.
Section 807 of the NDAA for Fiscal Year 2012 also mandated that we
report on DOD’s actions to improve service acquisition and
management. 7 This report addresses (1) DOD’s actions to address
legislative requirements in 10 U.S.C. § 2330 and section 807 and (2) the
extent to which DOD is able to determine whether its actions have
resulted in improvements to service acquisition and management.
To describe how DOD has addressed legislative requirements, we
reviewed policies, guidance, memorandums, and additional information
3
National Defense Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, § 812.
4
Pub. L. No. 111-84 (2009). The Defense Science Board was established to provide
independent advice and recommendations on science, technology, manufacturing,
acquisition processes, and other matters of special interest to the DOD.
5
Office of Under Secretary of Defense for Acquisition, Technology, and Logistics, Report
of the Defense Science Board Task Force on Improvements to Services Contracting
(Washington, D.C.: Mar. 8, 2011).
6
Pub. L. No. 112-81, § 807(b) (2011).
7
Pub. L. No. 112-81, § 807(c) (2011).
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GAO-13-634 Defense Acquisitions
documenting the actions that USD(AT&L) and the Departments of the Air
Force, Army, and Navy identified as taking in response to 10 U.S.C.
§ 2330 and section 807 of the NDAA for Fiscal Year 2012. We
interviewed USD(AT&L) and military department officials regarding how
DOD is implementing these actions. We also met with Defense
Acquisition University (DAU) officials to obtain information on training,
guidance, and other efforts to address legislative requirements for service
acquisition training or career development.
To evaluate the extent to which DOD is able to determine whether its
actions have resulted in improvements to service acquisition and
management, we interviewed USD(AT&L) and senior military department
officials responsible for overseeing service acquisition and management.
We reviewed supporting documentation on the approaches they have
used to gain insight into the effectiveness of their actions, including
USD(AT&L) and the military departments’ reviews of individual service
acquisitions. We then assessed whether these approaches reflected key
factors needed to improve service acquisition based on findings in our
November 2006 report to determine if improvement efforts are achieving
their intended results. 8 In the 2006 report, we identified several key
factors, which we consider to still be relevant, that leading commercial
firms reported must be in place to significantly improve service
acquisition. These factors include (1) leadership commitment, (2) a
desired end state with goals for the future, and (3) metrics that define
specified outcomes. We also found that critical to establishing a desired
end state with goals for the future is the ability to determine where service
acquisition is today in terms of specific and aggregate knowledge on the
current volume, type, location, and trends.
We conducted this performance audit from September 2012 to June 2013
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
8
GAO, Defense Acquisitions: Tailored Approach Needed to Improve Service Acquisition
Outcomes, GAO-07-20 (Washington, D.C.: Nov. 9, 2006).
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GAO-13-634 Defense Acquisitions
Background
Our prior work has found that DOD’s approach to managing service
acquisition has tended to be reactive and has not fully addressed key
factors for success at either the strategic or transactional level. 9 The
strategic level is where the enterprise sets the direction or vision for what
it needs, captures knowledge to enable more informed management
decisions, ensures enterprisewide goals and objectives are achieved,
determines how to go about meeting those needs, and assesses the
resources it has to achieve desired outcomes. The strategic level also
sets the context for the transactional level, where the focus is on making
sound decisions on individual acquisitions.
Congress has required USD(AT&L) to take a number of steps to improve
service acquisition. Specifically in 10 U.S.C. § 2330, enacted in 2001 and
amended in 2006, Congress required USD(AT&L) and the military
departments to establish a management structure for the acquisition of
services. 10 Since 2003, we have evaluated DOD’s implementation of
10 U.S.C. § 2330 and efforts to establish the management structure and
service acquisition approval process twice. First, in September 2003, we
concluded that DOD’s approach to managing service acquisition did not
provide a departmentwide assessment of how spending for services
could be more effective. 11 We therefore recommended that DOD give
greater attention to promoting a strategic orientation by setting
performance goals for improvements and ensuring accountability for
results. DOD concurred in principle with our recommendation and agreed
that additional actions could strengthen the management structure and
acquisition approval process but also identified challenges for doing so
based on its organizational size, complexity, and the acquisition
environment.
Subsequently, in November 2006, we found continued weaknesses
associated with DOD’s management of service acquisitions at the
strategic and transactional level. 12 Specifically, we found that DOD’s
approach to managing service acquisition tended to be reactive and that
the department had not developed a means for evaluating whether
9
GAO-07-20.
10
Pub. L. No. 107-107, § 801(b); Pub. L. No. 109-163, § 812.
11
GAO, Contract Management: High-Level Attention Needed to Transform DOD Services
Acquisition, GAO-03-935 (Washington, D.C.: Sept. 10, 2003).
12
GAO-07-20.
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GAO-13-634 Defense Acquisitions
ongoing and planned efforts were achieving intended results. DOD had
not developed a strategic vision and lacked sustained commitment to
managing service acquisition risks and fostering more efficient outcomes.
DOD also had not developed metrics to assess whether any changes to
improve service acquisition actually achieved the expected outcomes. As
a result, DOD was not in a position to determine whether investments in
services were achieving their desired outcomes. Moreover, the results of
individual acquisitions were generally not used to inform or adjust the
strategic direction. We recommended that, among other actions, DOD
take steps to understand how and where service acquisition dollars are
currently and will be spent, in part, to assist in adopting a proactive
approach to managing service acquisition. We also recommended that
DOD take steps to provide a capability to determine whether service
acquisitions are meeting cost, schedule, and performance objectives. At
that time, DOD concurred with our recommendations. USD(AT&L),
however, acknowledged in 2010 that DOD still needed a cohesive,
integrated strategy for acquiring services. DOD contract management has
remained on our High Risk List, in part, because DOD has not developed
such a strategy and continues to lack reliable services spending data to
inform decision making. 13
While Congress has required USD(AT&L) to take steps to improve
service acquisition, USD(AT&L) has taken actions on its own initiative as
well. For example, USD(AT&L) established its Better Buying Power
Initiative in a September 2010 memorandum to provide guidance for
obtaining greater efficiency and productivity in defense spending. In its
memorandum, USD(AT&L) emphasized that DOD must prepare to
continue supporting the warfighter through the acquisition of products and
services in potentially fiscally constrained times. In its own words,
USD(AT&L) noted that DOD must “do more without more.” USD(AT&L)
organized the Better Buying Power Initiative around five major areas,
including an area focused on improving tradecraft in service acquisition.
This area identified actions to improve service acquisition, such as
categorizing acquisitions by portfolio groups and assigning new managers
to coordinate these groups. USD(AT&L) issued another memorandum in
April 2013 to update the Better Buying Power Initiative. This
memorandum identifies seven areas USD(AT&L) is pursuing to increase
efficiency and productivity in defense spending. One area is to improve
service acquisition and the memorandum identifies a number of related
13
GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: February 2013).
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GAO-13-634 Defense Acquisitions
actions, such as increasing small business participation in service
acquisitions and improving how DOD conducts services-related market
research.
DOD Has Taken
Actions to Address
Legislative
Requirements to
Improve Service
Acquisition
Over the last decade, DOD has taken actions to address legislative
requirements to improve the acquisition and management of services.
Senior officials we spoke with across the military departments credit
USD(AT&L)’s leadership and commitment as the driving force behind
many of the actions taken to improve service acquisition. A number of
these actions were intended to strengthen DOD’s management structure
and approach to reviewing service acquisitions, as required by 10 U.S.C.
§ 2330. For example, both USD(AT&L) and the military departments
established new senior management positions to improve oversight and
coordination of service acquisition. With this management structure and
review process in place, USD(AT&L) is focusing on efforts to improve the
process for how requirements for individual service acquisitions are
developed and training to respond to legislative direction. USD(AT&L)
also created a senior-level team to identify and determine the training
needs for DOD personnel responsible for developing service acquisition
requirements. USD(AT&L) did not develop a specific implementation plan
as required by section 807, but officials identified a number of actions that
they regard as addressing the eight elements specified.
DOD Has Strengthened Its
Management Structure and
Service Acquisition Review
Process
Since 2002, DOD has increased its management attention on high dollar
value service acquisitions by instituting new policies and review
processes. In response to the initial requirements to establish a
management structure for the acquisition of services, USD(AT&L) issued
a guidance memorandum in May 2002. This memorandum required that
service acquisitions be reviewed and approved based on dollar
thresholds and that the acquisition strategy—addressing things such as
the requirements to be satisfied and any potential risks—be approved
prior to initiating any action to commit the government to the strategy.
Under this policy, USD(AT&L) was responsible for reviewing and
approving all proposed service acquisitions with an estimated value of
$2 billion or more. Following the 2006 amendment to 10 U.S.C. § 2330,
USD(AT&L) issued a revised memorandum in October of that year. Under
the revised policy, which remains in effect, USD(AT&L) lowered the
threshold for its review to service acquisitions valued at over $1 billion.
The military departments have developed internal policies for reviewing
and approving service acquisitions below USD(AT&L)’s threshold.
Further, USD(AT&L) required that acquisition strategies be reviewed
before contract award and that these and other acquisition planning
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GAO-13-634 Defense Acquisitions
documents include a top-level discussion of the source selection process
as well as noting any waivers and deviations. USD(AT&L) and military
department officials informed us that while these reviews are conducted,
they have not tracked the total number of service acquisitions reviewed to
date.
In 2008, USD(AT&L) incorporated these requirements into DOD
Instruction 5000.02, which is part of DOD’s overarching policy governing
the operation of the defense acquisition system. 14 This instruction
currently requires that senior officials across DOD consider a number of
factors when reviewing a service acquisition, including
•
the source of the requirement,
•
the previous approach to satisfying the requirement,
•
the total cost of the acquisition,
•
the competition strategy, and
•
the source selection planning.
USD(AT&L) expects to issue a stand-alone instruction in 2014 for service
acquisition policy to replace Enclosure 9 of DOD Instruction 5000.02.
Additionally, in a February 2009 memorandum, USD(AT&L) refined its
guidance on conducting service acquisition strategy reviews. Specifically,
USD(AT&L)’s memorandum identified criteria that service acquisitions
must adhere to and that reviewers are to assess, such as use of
appropriate contract type, maximization of competition, and inclusion of
objective criteria to measure contractor performance.
DOD also established new senior-level management positions, in part, to
address legislative requirements, although some roles and responsibilities
are still being defined. For example, the 2006 amendment to 10 U.S.C.
§ 2330 required that USD(AT&L) and the military departments establish
commodity managers to coordinate procurement of key categories of
services. In 2010 and 2012, USD(AT&L) revised how it organized its
contracted services under nine key categories. These categories of
14
Department of Defense Instruction 5000.02, Operation of the Defense Acquisition
System Encl. 9 (Dec. 8, 2008).
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GAO-13-634 Defense Acquisitions
services, referred to as portfolio groups, are (1) research and
development, (2) knowledge based, (3) logistics management,
(4) electronic and communication, (5) equipment related, (6) medical,
(7) facility related, (8) construction, and (9) transportation. In 2011, the
military departments began establishing commodity manager positions to
improve coordination and assist requiring activities with their procurement
of services within these portfolio groups. 15 By July 1, 2013, USD(AT&L)
expects to establish similar positions responsible for supporting the DODwide procurement of services, but their authorities and responsibilities are
not yet fully defined. Additionally, as part of its Better Buying Power
Initiative, USD(AT&L) assigned the Principal Deputy Under Secretary of
Defense for Acquisition, Technology, and Logistics as DOD’s senior
manager for service acquisition, responsible for policy, training, and
oversight across DOD. Table 1 summarizes the established positions and
accompanying responsibilities in descending order of their hierarchy
within DOD.
15
The military departments have different names for the commodity managers, including
portfolio managers, program directors, and portfolio coordinators.
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Table 1: Description of DOD Positions Responsible for Service Acquisition and Management
Position
Description
Under Secretary of Defense for Acquisition,
Technology, and Logistics (USD(AT&L))
•
•
•
Principal Deputy Under Secretary for
Acquisition, Technology, and Logistics
•
•
Director, Defense Procurement and
Acquisition Policy
•
•
Military Department Service Acquisition
a
Executives
•
•
•
Military Department Senior Services
Managers
•
•
•
Military Department Commodity Managers
•
•
•
•
10 U.S.C. § 2330 requires USD(AT&L) to develop and maintain policies,
procedures, and best practices guidelines addressing procurement of contracted
services
Senior official for management of service acquisition across DOD
Delegates approval authority for service acquisitions valued at $1 billion or more to
the Director of Defense Procurement and Acquisition Policy
USD(AT&L) designated this position as the senior manager for service acquisition
through its April 2013 Better Buying Power Initiative memorandum
While USD(AT&L) is defining specific responsibilities and authorities, DOD officials
indicated this position will be generally responsible for policy, training, and
oversight of service acquisition across DOD
Responsible for acquisition policy, oversight of Defense Federal Acquisition
Regulation Supplement, and other duties within USD(AT&L)
Approval authority for service acquisitions valued at $1 billion or more, as
delegated by USD(AT&L)
10 U.S.C. § 2330 designated the Service Acquisition Executives as the senior
officials responsible for service acquisition in the military departments
Responsible for management, oversight, and departmental policy for service
acquisition
Approval authority for service acquisitions valued between $250 million and
$1 billion, unless otherwise delegated within their departments
USD(AT&L) required the military departments to establish these positions in its
September 2010 Better Buying Power Initiative memorandum
Senior manager within the military departments responsible for strategic planning,
execution, and management of services within each military department
Approval authority for service acquisitions valued between $10 million and $250
million, unless otherwise delegated within their departments
10 U.S.C. § 2330 required these positions be established, but the military
departments did not begin creating these positions until 2011
Service acquisition professionals within the military departments’ offices of the
senior services managers responsible for coordination of service acquisitions within
their assigned portfolio group
Support spend analysis and strategic sourcing efforts within their respective military
b
departments
Not an approval authority for service acquisitions
Source: GAO analysis of DOD data.
a
Service acquisition executives are responsible for overseeing the acquisition of both products and
services within their respective military departments.
b
Spend analysis provides knowledge about how much is being spent for goods and services, who the
buyers are, who the suppliers are, and where the opportunities are to save money and improve
performance. Strategic sourcing is defined by the Office of Management and Budget as a structured
process based on spend analysis to make business decisions about acquiring commodities and
services more efficiently and effectively.
.
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While these positions have a role in reviewing, approving, or coordinating
individual service acquisitions, senior USD(AT&L) and military department
officials explained that they do not have responsibility or authority for
making departmentwide decisions, such as determining current or future
resources allocated to contracted services. These officials explained that
the military departments’ commands and requiring activities are
responsible for determining their requirements and how best to meet
them, as well as requesting and allocating budgetary resources. For
example, while USD(AT&L) officials and the military department senior
services managers are responsible for reviewing service acquisitions to
determine whether the planned acquisition strategy clearly defines the
military department’s requirement, they do not determine what contracted
services are needed or whether an alternative acquisition approach could
better meet their need. USD(AT&L) officials and the military department
senior services managers stated they do not have insight into each
requiring activity’s specific needs and are not positioned to validate those
needs.
For additional details on the actions that USD(AT&L) and the military
departments have taken to address the specific requirements of
10 U.S.C. § 2330, see appendix I.
DOD Continues to Focus
on Improving the
Requirements
Development Process and
Training for Individual
Service Acquisitions
USD(AT&L) has planned and implemented actions to improve DOD’s
process for developing requirements for individual service acquisitions, as
required by the 2006 amendment to 10 U.S.C. § 2330. 16 USD(AT&L)
officials noted that it has collaborated with DAU officials to develop new
tools and training to help DOD personnel develop better acquisitions. For
example,
•
USD(AT&L) collaborated with DAU to create the Acquisition
Requirements Roadmap Tool (ARRT) in 2012. The ARRT is an online
resource designed to help personnel write performance-based
requirements and create several pre-award documents, including
performance work statements and quality assurance surveillance
plans. The ARRT guides users through a series of questions to
develop the pre-award documents using a standardized template
tailored to the specific requirement for services. Although using the
16
Requirements development is the process by which DOD personnel identify a need for a
service and translate that need into certain contracting documents, including a
performance work statement or quality assurance surveillance plan.
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ARRT is not required across DOD, DAU officials told us they have
integrated its use into other DAU training, such as the Performance
Requirements for Service Acquisitions course. DAU officials did not
have data on the effectiveness of the ARRT but noted that feedback
has been positive. For example, they have heard that performance
work statements are better reflecting requirements as a result of
personnel using the tool.
•
In 2009, DAU introduced its Services Acquisition Workshop (SAW) to
provide training and guidance on developing service acquisition
requirements. The SAW is a 4-day workshop tailored to proposed
service acquisitions. Upon request from commands or requiring
activities, DAU officials travel to the requestor and convene the
multifunctional team responsible for an acquisition, including general
counsel, individuals associated with the acquisition requirements,
contracting personnel, and oversight personnel. This team is then to
develop the language that will be used to articulate the service
requirement using the ARRT. By the end of the 4 days, the command
is to have drafts of its performance work statement, quality assurance
surveillance plan, and performance requirement summary. A key
aspect of the workshop DAU officials identified is that it brings
together the key personnel responsible for the acquisition to discuss
the service requirements and how they will know if a contractor has
met those requirements. From fiscal years 2009 through 2012, DAU
conducted 78 SAWs. In 2012, USD(AT&L) mandated use of the SAW
for service acquisitions valued at $1 billion and above and is
encouraging its use for acquisitions valued at $100 million or more.
USD(AT&L) has directed the Director of Defense Procurement and
Acquisition Policy (DPAP) and the senior services managers to
assess the effectiveness of the SAW and develop lessons learned
and best practices by October 1, 2013.
In addition to implementing the ARRT and the SAW, USD(AT&L)
established the Acquisition of Services Functional Integrated Product
Team (Services FIPT) in August 2012, in part, to address training
requirements in 10 U.S.C. § 2330. According to its charter, the Services
FIPT is comprised of the Director of DPAP, DAU officials, and other
officials responsible for acquisition career management within the DOD.
The Services FIPT is to provide input toward the development and
dissemination of training products and practical tools to assist personnel
responsible for acquiring services. In addition, the Services FIPT is to
explore the feasibility of certification standards and career development
for all personnel who acquire services, including personnel within and
outside of the defense acquisition workforce. USD(AT&L) officials
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GAO-13-634 Defense Acquisitions
explained that non-acquisition personnel are most often involved in the
requirements development portion of the acquisition process but may not
be trained on how DOD buys services. In 2011, we found that nonacquisition personnel with acquisition-related responsibilities represented
more than half of the 430 personnel involved in the 29 services contracts
we reviewed. 17 While we found that non-acquisition personnel received
some acquisition training, this training was largely related to contract
oversight as opposed to requirements development. According to its
charter, one of the Services FIPT’s first tasks will be to identify DOD’s
non-acquisition personnel involved in service acquisitions and determine
how best to train them.
The Services FIPT, however, has made little progress to date, and has
met once since it was established. USD(AT&L) officials could not provide
a time line for when the Services FIPT may fully address the training
requirements in 10 U.S.C. § 2330. The officials explained that they expect
the team to make more progress in 2013 when the Principal Deputy
Under Secretary for Acquisition, Technology, and Logistics assumes
leadership of the Services FIPT.
USD(AT&L) Did Not
Develop a Plan to Meet the
Requirement of Section
807 but Has Taken Actions
to Address Each Element
in the Law
Section 807 of the NDAA for Fiscal Year 2012 required USD(AT&L) to
develop a plan by June 28, 2012, for implementing the recommendations
of the DSB to include, to the extent USD(AT&L) deemed appropriate, the
following eight elements:
1. incentives to services contractors for high performance at low cost,
2. communication between the government and the services contracting
industry while developing requirements for services contracts,
3. guidance for defense acquisition personnel on the use of appropriate
contract types,
4. formal certification and training requirements for services acquisition
personnel,
5. recruiting and training of services acquisition personnel,
17
GAO, Defense Acquisition Workforce: Better Identification, Development, and Oversight
Needed for Personnel Involved in Acquiring Services, GAO-11-892 (Washington, D.C.:
Sept. 26, 2011).
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GAO-13-634 Defense Acquisitions
6. policies and guidance on career development for services acquisition
personnel,
7. ensuring the military departments dedicate portfolio-specific
commodity managers, and
8. ensuring DOD conducts realistic exercises and training that account
for services contracting during contingency operations.
USD(AT&L) officials told us they did not develop a specific plan to
address the section 807 requirement. They explained, however, that the
April 2013 Better Buying Power Initiative memorandum addresses seven
of the eight elements and that they have addressed the last element
through a separate effort. In reviewing the April 2013 memorandum, we
also found that it reflects actions to address all of the elements except the
one pertaining to training and exercises during contingency operations.
USD(AT&L) also identified 23 different actions it has taken or plans to
take that officials regard as addressing all of the elements the plan was to
include, some of which pre-date the April 2013 Better Buying Power
Initiative memorandum. For example,
•
In January 2012, USD(AT&L) issued guidance to improve how
DOD communicates with the vendor community.
•
In April 2013, USD(AT&L) directed that new guidance be
developed to help acquisition personnel select the appropriate
contract type and contractor performance incentives in DOD’s
service acquisitions.
•
DOD plans to conduct a joint mission rehearsal exercise in 2014
that will include training for services contracting during
contingency operations.
See appendix II for a more detailed description of the actions USD(AT&L)
took to address the section 807 elements.
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GAO-13-634 Defense Acquisitions
DOD Has Not Fully
Addressed Key
Factors to Determine
Whether Actions Are
Improving Service
Acquisition
While DOD has taken a number of actions to address legislative
requirements, DOD is not yet positioned to determine what effects its
actions have had on improving service acquisition. Specifically,
USD(AT&L) has not yet fully addressed two key factors—a desired end
state for the future with specific goals and associated metrics that would
enable it to assess progress toward achieving those goals and determine
whether service acquisition is improving. USD(AT&L) is challenged in
addressing these key factors, in part, because it has limited insight into
the current status of service acquisition in terms of the volume, type,
location, and trends. While they have not established metrics to assess
departmentwide progress, USD(AT&L) officials rely on reviews of
individual service acquisitions, command level assessments, and
feedback from the military departments as means to gauge whether
DOD’s efforts are contributing to better service acquisitions. DOD has not
established aggregated results or trends which could be used to provide a
departmentwide perspective on the effects of its actions.
DOD Does Not Have the
Information Needed to
Define a Desired End State
for Its Improvement
Efforts
USD(AT&L) and military department leadership have demonstrated a
commitment to improving service acquisition, but USD(AT&L) officials
stated that they have not defined the desired end state or specific goals
its actions were intended to achieve. In our November 2006 report, we
found, based on assessments of leading commercial firms, that
identifying and communicating a defined end state or specific goals can
significantly improve service acquisition. 18 This work also found that being
able to define a desired end state or what goals are to be achieved at a
specified time necessitates knowledge of the current volume, type,
location, and trends of service acquisitions.
USD(AT&L) and the military department senior services managers
acknowledge that they are challenged in defining the desired end state, in
part, because limitations within DOD’s contracting and financial data
systems hinder their insight into where service acquisition is today.
USD(AT&L) and military department officials explained that DOD’s
primary source of information on contracts, the Federal Procurement Data
System-Next Generation (FPDS-NG), has a number of data limitations,
including that it
18
GAO-07-20.
Page 14
GAO-13-634 Defense Acquisitions
•
only reflects the predominant service purchased on a service
contract,
•
does not reveal any services embedded in a contract for goods,
and
•
does not fully identify the location of the requiring activity
contracting for the service.
Additionally, DOD’s financial systems do not provide detailed information
on DOD’s budget and actual spending on specific types of contracted
services and are not linked to the data maintained in FPDS-NG. 19
According to USD(AT&L) officials and the senior services managers,
collectively, the limitations of both FPDS-NG and DOD’s financial systems
create challenges in identifying the current volume, type, location, and
any potential trends in service acquisition. For example, USD(AT&L)
stated that DOD wants to more strategically manage its nine portfolio
groups of contracted services but does not have adequate insight into
what services DOD currently buys within these portfolio groups.
To improve insight into DOD’s contracted services, USD(AT&L) is linking
DOD’s contract and financial data systems and increasing the level of
detail these systems provide. For example, DOD is updating its financial
systems to provide data on each service purchased under a contract.
USD(AT&L) officials stated that improving and linking data within its
contract and financial systems will enable DOD to determine what it
budgeted for a particular service, what it actually spent for that service,
and which organizations bought the service. Officials, however, do not
expect to have this capability until at least 2014. USD(AT&L) officials
noted that this effort could help provide better insight into future budget
requirements for services. USD(AT&L) officials also stated that they are
exploring how to use Electronic Document Access—a DOD online
document access system for acquisition related information—to provide
them with better insight into the different types of services DOD buys
under each of its contracts. USD(AT&L) identified that, collectively, these
efforts will help them to improve the management of its nine portfolio
groups of contracted services, thereby enabling the department to
19
For additional information on DOD’s efforts to improve its insight into contracted
services, see GAO, Defense Acquisitions: Continued Management Attention Needed to
Enhance Use of DOD’s Inventory of Contracted Services, GAO-13-491 (Washington,
D.C.: May 23, 2013).
Page 15
GAO-13-634 Defense Acquisitions
•
better leverage its buying power,
•
provide insight into the marketplace and buying behaviors, and
•
identify opportunities for cost savings.
In its April 2013 Better Buying Power Initiative memorandum, USD(AT&L)
also identified that by managing service acquisition by portfolio group, the
senior services managers should be able to work with requiring activities
to forecast future services requirements. While the military departments
have taken some steps to forecast or track future contracted services
requirements, these efforts are too new to determine their utility in
identifying what services DOD plans to buy. For example, in 2012, the
Army senior services manager requested that Army commands provide
an estimate for contracted services valued over $10 million to be
purchased over the next five fiscal years in an effort to identify any
potential cost savings. Air Force officials also track information on service
acquisitions that they expect will be awarded over the next three years to
aid in planning acquisition strategy reviews. The Navy is developing its
own approach to forecast future contracted services requirements, which
officials stated will be implemented in 2013. While it is too early to assess
the effects of these forecast or tracking efforts, they have the potential to
help the military departments better understand what services will be
purchased and facilitate DOD in identifying its desired end state for
service acquisition.
USD(AT&L) Has Not
Established Metrics to
Determine its Progress in
Improving Service
Acquisition
USD(AT&L) has not established departmentwide metrics to assess the
effects of its actions to improve service acquisition. Our prior work found
that metrics linked to specified outcomes are another key factor to
(1) evaluating and understanding performance levels, (2) identifying
critical processes that require attention, (3) documenting results over
time, and (4) reporting information to senior officials for decision making
purposes. 20 In lieu of such metrics, USD(AT&L) and military department
officials stated that they rely on results from reviews of individual service
acquisitions, command level assessments, and feedback from the military
departments to gauge whether the department’s actions to improve
services acquisitions, such as those required by Congress or established
under DOD’s Better Buying Power Initiative, are having a positive effect.
20
GAO-07-20.
Page 16
GAO-13-634 Defense Acquisitions
USD(AT&L) officials have acknowledged the need to establish
departmentwide metrics but explained that developing such metrics has
proven challenging. They further indicated that metrics used by leading
commercial companies, which often focus on reducing spending for
services to improve a company’s financial position, may not be
appropriate for DOD. 21 USD(AT&L) officials noted that DOD’s budget is
based on an assessment of its missions and the resources needed to
achieve its objective. These officials noted that while DOD is continuously
looking for ways to improve its efficiency, it is difficult to set goals and
measure actual reductions in spending as any savings or cost avoidances
will generally be invested in other unfunded or high priority activities.
Further, USD(AT&L) officials noted that since DOD’s budget is
appropriated by Congress rather than derived from the sale of goods and
services, changes in its resources are often outside its direct control.
While developing goals and metrics is challenging, it is not impossible.
DOD has acknowledged the need to establish departmentwide metrics.
For example, our recent work on strategic sourcing—a process that
moves an organization away from numerous individual acquisitions to a
broader, aggregate approach—found that federal agencies, including
DOD, could expand the use of this approach. 22 Strategic sourcing
enables federal agencies to lower costs and maximize the value of
services they buy, which is consistent with DOD’s Better Buying Power
Initiative. We found that some agencies, including DOD, did not address
the categories that represented their highest spending, the majority of
which exceeded $1 billion and were for services. To improve its strategic
sourcing efforts at DOD, we recommended, among other things, that
DOD set goals for the amount of spending managed through strategically
sourced acquisitions, link strategic sourcing to its Better Buying Power
Initiative, and establish metrics, such as utilization rates, to track progress
toward these goals. DOD concurred with the recommendations and
stated it would establish goals and metrics by September 2013.
In the absence of departmentwide metrics, USD(AT&L) officials and
senior services managers identified several ongoing efforts they rely on to
21
For additional information on commercial practices, see GAO, Strategic Sourcing:
Leading Commercial Practices Can Help Federal Agencies Increase Savings When
Acquiring Services, GAO-13-417 (Washington, D.C.: May 15, 2013).
22
GAO, Strategic Sourcing: Improved and Expended Use Could Save Billions in Annual
Procurement Costs, GAO-12-919 (Washington, D.C.: Sept. 20, 2012).
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GAO-13-634 Defense Acquisitions
gauge the effects of their actions to improve service acquisition. For
example, USD(AT&L) and the military departments conduct pre- and
post-award independent management reviews, or peer reviews, to ensure
individual service acquisitions are conducted in accordance with
applicable laws, regulations, and policies. 23 USD(AT&L) and military
department officials stated that through these peer reviews, they can
determine if individual service acquisitions have resulted in the intended
outcomes. For example, during the post-award phase, reviewers are to
assess whether cost, schedule, and performance measures associated
with individual service acquisitions are being achieved. We have
previously found, however, that cost or schedule performance measures
may not be as effective for service acquisitions as they are for product or
weapon system acquisitions. 24 Further, while peer reviews provide DOD
with insight into the performance of a single service acquisition, DOD
does not have information on how many post-award peer reviews have
been completed by the military departments and has not aggregated the
results or identified trends from all of DOD’s peer reviews.
Additionally, the Air Force and the Navy are conducting assessments at
the command level to evaluate organizations that buy and manage
service acquisitions. These assessments are intended to identify
performance levels, needed improvements, and best practices. For
example, the Air Force implemented health assessments to review a
command’s timeliness of contract awards, creation and use of
standardized templates, implementation of internal and external
recommendations and new policy requirements, and quality of
communication. According to officials, the Air Force first implemented its
health assessments in approximately 2009 to rate or score each of its
commands in a number of different performance areas, such as program
management and fiscal responsibility. Air Force officials reported,
however, that they have not established baselines or identified any
quantifiable trends from these health assessments. That said, Air Force
officials told us that these assessments have contributed to improvements
in the service acquisition process. For example, in a 2011 health
assessment, the Air Force found that one program office reduced the use
of bridge contracts—a potentially undesirable contract that spans the time
between an expiring contract and a new award—by 50 percent from fiscal
23
National Defense Authorization Act for Fiscal year 2007, Pub. L. No. 110-181, § 808
(2008).
24
GAO-07-20.
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GAO-13-634 Defense Acquisitions
year 2010 to 2011. 25 The Navy completed its first health assessment in
2012. During this assessment, the Navy identified a requirements
development tool created and used within a command that was
potentially a best practice and is being considered for Navy-wide use. The
Army’s senior services manager is in the process of determining how to
assess the health of the Army’s service acquisition organizations and
expects to implement an approach in 2013.
USD(AT&L) officials also plan to assess the health of service acquisition
across the military departments, potentially down to the program office
level, using a number of indicators of risks, referred to as tripwires.
Tripwires are established thresholds for measurable risk or performance
indicators related to the acquisition of goods or services that, when
triggered, could result in further review. USD(AT&L) officials stated that
tripwires are still under development but could include thresholds for the
number of days FPDS-NG data was input past deadlines or the number
of contract modifications within 30 days of contract award. USD(AT&L)
officials explained that tripwires alone are not sufficient to assess service
acquisition performance, but tripwires could provide insight into what may
or may not be going well and provide trend data over time.
Further, USD(AT&L) annually reviews the military departments and other
DOD components to understand the effects of its actions and policies
related to improving service acquisitions and solicit recommendations for
changes. For example, in 2012, USD(AT&L) inquired about the actions
that have been taken to comply with various defense acquisition
regulations or policies, such as the Better Buying Power Initiative. The
Army’s and Navy’s responses noted that actions to improve competition
led to an 11 and 12 percent increase, respectively, in the rate of effective
competition—situations where more than one offer is received in
response to a competitive solicitation—for service contracts from fiscal
year 2010 through 2012. In response to an open-ended question on
recommendations for improvements, each military department suggested
that USD(AT&L) take additional actions to increase departmentwide
coordination on service acquisitions. Specifically, the Army and the Air
Force recommended departmentwide service acquisition management
25
Our prior work has found that bridge contracts are typically the result of unexpected
delays in the acquisition process such as bid protests or undesirable delays due to a lack
of sufficient acquisition planning. GAO, Defense Contracting: Competition for Services and
Recent Initiatives to Increase Competitive Procurements, GAO-12-384 (Washington, D.C.:
Mar. 15, 2012).
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GAO-13-634 Defense Acquisitions
meetings to coordinate on issues such as emerging regulations,
directives, and policies to improve service acquisitions. In response,
USD(AT&L) officials told us that the Director of DPAP meets with the
military departments’ senior services managers regularly.
DOD’s ongoing efforts to gauge the effects of their actions to improve
service acquisition also offer opportunities for DOD to develop baseline
data, establish goals, and identify departmentwide metrics to measure
progress. For example, by analyzing and aggregating the results of its
health assessments, each military department could establish baselines
against which to assess individual commands and over time, identify
trends to determine if its commands are improving how they acquire
services. Similarly, in coordination with the military departments,
USD(AT&L) could use its tripwire approach to determine what percent of
DOD’s service acquisition strategies are not approved or require changes
before approval. DOD could then use such information to help identify
reasons for why certain service acquisitions are not approved and
determine appropriate corrective actions. DOD could further develop
metrics associated with actions outlined in the Better Buying Power
Initiative. For example, using its established services portfolio groups,
DOD could develop baseline data on the degree of effective competition
for services within each group. Depending on the results of that analysis,
DOD could determine whether it would be appropriate to establish
effective competition goals and metrics for each portfolio group or specific
types of services within each group.
Conclusions
In light of the billions of dollars DOD spends each year on services and
the constrained fiscal environment, it is critical for DOD to identify how it
can best utilize its financial resources and acquire services more
efficiently and effectively. DOD leadership has demonstrated a
commitment to improving service acquisition and management and has
taken a number of actions to address legislative requirements. For
example, USD(AT&L) and the military departments have focused more
management attention on improving service acquisitions through new
policies and guidance, reviews of high-dollar service acquisitions, and
new tools and training for personnel who acquire services. Further, DOD
recently designated the Principal Deputy Under Secretary of Defense for
Acquisition, Technology, and Logistics as the department’s senior
manager for service acquisition and has established similar positions,
including senior services managers, within each of the military
departments. In some cases, however, DOD remains in the process of
defining the duties and responsibilities of these positions. When taken
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GAO-13-634 Defense Acquisitions
collectively, DOD has taken action to address the requirements of
10 U.S.C. § 2330 and section 807 of the NDAA for Fiscal Year 2012.
DOD, however, does not know whether or how these actions, individually
or collectively, have resulted in improvements to service acquisition. This
is due, in part, to the fact that DOD continues to have limited knowledge
and baseline data on the current state of service acquisition. To address
this shortfall, DOD expects to obtain better service acquisition data by
improving and linking data within its contract and financial systems, but
this effort will not be complete until at least 2014. Having baseline budget
and spending data can provide a foundation for measuring progress, but
other factors such as articulating its desired end state and developing
specific and measurable goals are also important for assessing progress.
While developing specific goals and departmentwide metrics is
challenging, it is not impossible. For example, DOD concurred with the
need to set goals for the amount of spending managed through
strategically sourced acquisitions, link strategic sourcing to its Better
Buying Power Initiative, and establish metrics, such as utilization rates, to
track progress toward these goals. However, DOD is currently missing
opportunities to fully leverage its command-level assessments, feedback
from the military departments, and other ongoing efforts it relies on to
gauge the effects of its actions to improve service acquisition. Each of
these efforts has merit and value in their own regard. Nevertheless, until
DOD utilizes them to develop baseline data, goals, and associated
metrics, similar to what it has committed to do for its strategic sourcing
efforts, DOD will continue to be in a position where it does not know
whether its actions are sufficient to achieve desired outcomes.
Recommendations for
Executive Action
To better position DOD to determine whether its actions have improved
service acquisition, we recommend that the Principal Deputy Under
Secretary of Defense for Acquisition, Technology, and Logistics, in
consultation with the military departments’ senior services managers, take
the following three actions:
•
identify baseline data on the status of service acquisition, in part,
by using budget and spending data and leveraging its ongoing
efforts to gauge the effects of its actions to improve service
acquisition,
•
develop specific goals associated with their actions to improve
service acquisition, and
•
establish metrics to assess progress in meeting these goals.
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GAO-13-634 Defense Acquisitions
Agency Comments
and Our Evalutation
DOD provided us with written comments on a draft on this report, which
are reprinted in appendix III. DOD concurred with the three
recommendations, noting that they are consistent with DOD’s ongoing
Better Buying Power Initiative. DOD also stated that as it improves its
management of service acquisition, it should be able to measure
performance, track productivity trends, and establish consistent best
practices across the department. We agree that DOD has the opportunity
to leverage its ongoing efforts as it works to implement our
recommendations. By incorporating our recommendations into those
efforts, DOD will be better positioned to determine whether its actions are
improving service acquisition. DOD also provided technical comments,
which were incorporated as appropriate.
We are sending copies of this report to the Secretary of Defense; the
Secretaries of the Army, Air Force, and the Navy; the Principal Deputy
Under Secretary of Defense for Acquisition, Technology, and Logistics;
and interested congressional committees. This report will also be
available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions concerning this report, please
contact me at (202) 512-4841 or by e-mail at dinapolit@gao.gov. Contact
points for our Offices of Congressional Relations and Public Affairs may
be found on the last page of this report. Staff who made key contributions
to this report are listed in appendix IV.
Timothy J. DiNapoli
Director
Acquisition and Sourcing Management
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GAO-13-634 Defense Acquisitions
List of Committees
The Honorable Carl Levin
Chairman
The Honorable James Inhofe
Ranking Member
Committee on Armed Services
United States Senate
The Honorable Dick Durbin
Chairman
The Honorable Thad Cochran
Ranking Member
Subcommittee on Defense
Committee on Appropriations
United States Senate
The Honorable Howard P. “Buck” McKeon
Chairman
The Honorable Adam Smith
Ranking Member
Committee on Armed Services
House of Representatives
The Honorable C.W. “Bill” Young
Chairman
The Honorable Pete Visclosky
Ranking Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives
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GAO-13-634 Defense Acquisitions
Appendix I: Department of Defense Actions
to Implement Requirements in 10 U.S.C. §
2330
Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
In 2001, Congress required the Secretary of Defense to implement a
management structure for the acquisition of services under section 2330,
title 10, United States Code (U.S.C.). 1 This provision requires, among
other things, the Department of Defense (DOD) to develop a process for
approving individual service acquisitions based on dollar thresholds and
other criteria to ensure that DOD acquires services by means that are in
the government’s best interest and managed in compliance with
applicable statutory requirements. Under DOD’s initial May 2002
guidance for implementing the required management structure and
service acquisition approval process, the Under Secretary of Defense for
Acquisition, Technology, and Logistics (USD(AT&L)) was to review all
proposed service acquisitions with an estimated value of $2 billion or
more. The military departments and other defense components were to
review service acquisitions below that threshold. 2 The military
departments each subsequently developed their own service acquisition
approval processes that had several elements in common. Chief among
these elements was the requirement that acquisition strategies be
reviewed and approved by senior officials before contracts are awarded.
Acquisition strategies to be reviewed were to include, among other things,
information on contract requirements, anticipated risks, and business
arrangements. Once acquisition strategies were approved, DOD
contracting offices may continue the acquisition process, including
soliciting bids for proposed work and awarding contracts.
In January 2006, Congress amended 10 U.S.C. § 2330 to include
additional requirements for DOD’s management of the acquisition of
services. 3 The amendment requires, among other things, that the senior
officials responsible for management of acquisition of contract services
assign responsibility for the review and approval of procurements based
on estimated value of the acquisition. Senior officials within DOD are
identified as USD(AT&L) and the service acquisition executives of the
military departments. In response to these requirements, USD(AT&L)
issued an October 2006 memorandum to update its 2002 acquisition of
services policy. The revised policy identifies categories of service
1
National Defense Authorization Act for Fiscal Year 2002, Pub. L. No. 107-107, § 801(b)
(2001).
2
Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,
Acquisition of Services, May 31, 2002.
3
National Defense Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, § 812.
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GAO-13-634 Defense Acquisitions
Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
acquisitions, based on dollar thresholds and related roles and
responsibilities within USD(AT&L) and the military departments. 4 The
policy requires all proposed service acquisitions with a value estimated at
more than $1 billion be referred to USD(AT&L) and formally reviewed at
the discretion of USD(AT&L). 5 Acquisitions with a value estimated under
that threshold are subject to military department acquisition approval
reviews. 6 USD(AT&L)’s 2006 acquisition of services policy was
incorporated into Enclosure 9 of DOD’s 5000.02 acquisition instruction. 7
In 2010, USD(AT&L) required that each of the military departments
establish senior managers to be responsible for the governance in
planning, execution, strategic sourcing, and management of service
contracts. Additionally, these senior managers are to review service
acquisitions valued at $10 million but less than $250 million. USD(AT&L)
expects to issue a stand-alone instruction in 2014 for service acquisition
policy to replace Enclosure 9 of DOD Instruction 5000.02. See table 2 for
a summary of service acquisition review thresholds and approval
authorities.
4
Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,
Acquisition of Services Policy, October 2, 2006.
5
The memorandum also provides for the review of “special interest” acquisitions, which
are not defined in the memorandum but may be designated as such by USD(AT&L) or
other senior officials.
6
Specifically, under the 2006 policy, a service acquisition valued at greater than the
simplified acquisition threshold but not greater than $1 billion by or on behalf of a military
department will be reviewed by the senior official responsible for the management of
acquisitions of services for the respective military department, or as designated. A service
acquisition valued at greater than the simplified acquisition threshold but not greater than
$1 billion by or on behalf of the DOD components outside the military departments will be
reviewed by the senior official responsible for the management of acquisitions of services
for the DOD components, who is USD(AT&L), or as designated.
7
Although the acquisition of services policy incorporated in enclosure 9 of the 5000.02
instruction is substantially similar to USD(AT&L)’s 2006 policy, the 5000.02 policy provides
that for service acquisitions estimated to cost over $1 billion, the senior officials of the
military departments and decision authorities in DOD components outside the military
departments shall notify USD(AT&L) of the proposed acquisition, and USD(AT&L) or as
designated shall initiate a review of the proposed acquisition strategy. The review shall be
completed within 30 days and the acquisition may only proceed after the acquisition
strategy has been approved. Department of Defense Instruction 5000.02, Operation of the
Defense Acquisition System Encl. 9, paras. 5.b.(1)-(4).
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GAO-13-634 Defense Acquisitions
Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Table 2: Summary of DOD’s Service Acquisition Dollar Thresholds and Approval
Authorities
Service acquisition dollar threshold
Approval authority
Any acquisition of services with a total estimated value
of $1 billion or more
USD(AT&L) or designee
As designated by USD(AT&L), DOD Chief Information
Officer, or military department senior official
USD(AT&L) or senior officials
Acquisitions of services with estimated value of $250
million or more
Military department senior
a
official or as designated
Acquisitions of services with estimated value of $10
million or more, but less than $250 million
Military department senior
manager or as designated
Acquisitions of services with estimated value more than
the simplified acquisition threshold but less than $10
million
Military department senior
manager or as designated
Source: USD(AT&L).
Note: Approval authorities for service acquisitions with an estimated value of under $250 million differ
within the military departments, as these responsibilities may be delegated to other officials within
each department consistent with USD(AT&L)’s policy. Also, any acquisition of information technology
services with a total estimated value greater than $500 million is to be approved by the DOD Chief
Information Officer or as designated.
a
USD(AT&L) is the senior official for other defense agencies with DOD.
The 2006 amendments to 10 U.S.C. § 2330 require DOD to take a
number of other actions. For example, DOD is to develop service
acquisition policies, guidance, and best practices; appoint full-time
commodity managers for key categories of services; and ensure
competitive procedures and performance-based contracting be used to
the maximum extent practicable. In table 3, we summarize the actions
that DOD took in response to the requirements in 10 U.S.C. § 2330. To
do so, we collected USD(AT&L) and each military department’s selfreported information using a data collection template; corroborated
reported actions with related documentation when available; and
conducted interviews with knowledgeable agency officials to clarify
responses. We did not evaluate the appropriateness or sufficiency of any
actions taken or planned by DOD.
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Table 3: Actions Identified by USD(AT&L) and Military Departments to Address Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
(a) Requirement for management structure. The Secretary of Defense shall establish and implement a management structure for the
procurement of contract services for the DOD. The management structure shall provide at a minimum, for the following:
(a)(1)(A) USD(AT&L) shall develop and maintain (in consultation with the service acquisition executives) policies, procedures, and
best practices guidelines addressing procurement of contract services, including policies, procedures, and best practices guidelines
for
(a)(1)(A)(i) acquisition planning;
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services,” in December 2008. This instruction requires that senior officials
or their designees consider various elements in reviewing a planned
service acquisition including acquisition planning. The instruction also
requires officials to consider the cost of the total acquisition, the
availability of funding, opportunities to implement socio-economic
business concerns and strategic sourcing, competition strategy, and
source selection planning.
DOD issued its “Guidebook for the Acquisition of Services” in July 2011 to
provide guidance for the activities that should be conducted during
acquisition planning. The guidance recommends the formation of a multifunctional team to plan and manage an acquisition throughout its lifecycle,
a review of current approaches to acquiring the required services, and the
need to conduct market research.
The Office of the Secretary of Defense, Defense Procurement and
Acquisition Policy (DPAP) issued, in April 2012, the “Market Research
Report Guide For Improving the Tradecraft in Services Acquisition” to aid
in the conducting of market research. According to the guidance, it was
developed in part to translate DOD’s best practices for conducting and
documenting market research into standard processes and reports. The
guidance includes a template for documenting market research to
facilitate more effective collection and sharing of market research across
DOD.
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GAO-13-634 Defense Acquisitions
Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services,” in December 2008. This instruction requires senior officials or
their designees to consider various elements in reviewing a planned
service acquisition including the identified approach for solicitation and
contract award. Officials are required to consider the type of business
arrangement anticipated, pricing arrangements, and proposed evaluation
criteria.
(a)(1)(A)(ii) solicitation and contract award;
DOD issued its “Guidebook for the Acquisition of Services” in July 2011 to
provide guidance for the activities that should be conducted when
soliciting and awarding contracts, including factors to consider when
determining the type of business arrangement and incentives that will be
used. The guidebook also provides instructions for drafting a request for
proposal and for performance work statements.
Defense Acquisition University (DAU) developed the “Acquisition
Requirements Roadmap Tool (ARRT)” in 2012 to provide DOD personnel
with a step-by-step process for developing performance-based service
acquisitions. Among other things, the tool is intended to help users
generate a performance work statement tailored to their requirements
within a standardized format.
(a)(1)(A)(iii) requirements development and management; USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services,” in December 2008. This instruction requires that senior officials
or their designees consider various elements in reviewing a planned
service acquisition including the source of the requirement, outcomes to
be achieved, and how the requirement was previously satisfied.
In 2012, DPAP required the military departments to establish processes
for identifying, assessing, reviewing, and validating requirements in
a
response to a separate legislative requirement. The military departments
subsequently developed their own processes to meet the requirement.
DAU developed the ARRT to provide guidance on developing
requirements for contractor-provided services. DAU officials told us that,
according to ARRT-users, the tool has resulted in more precise language
on the requirement for services in performance work statements.
DAU, in coordination with DPAP, developed the Service Acquisition
Workshop in 2009 to provide participants with a tailored, interactive,
week-long course on performance-based techniques to service
acquisitions. The DPAP-funded workshop sponsors instructors from DAU
to travel to commands that are developing new service acquisitions. DAU
officials explained that once the workshop is complete, the command will
have drafted the performance work statement and quality assurance
surveillance plan. DAU reported that it conducted 80 workshops between
2009 and 2012. In December 2012, DPAP issued a policy memorandum
requiring that Service Acquisition Workshops be conducted for all service
acquisitions valued at $1 billion or more. The memorandum notes that this
workshop has improved the quality of requirements documents while
increasing the likelihood of competition and shortening acquisition lead
times.
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services,” in December 2008. This instruction requires that senior officials
or their designees consider various elements in reviewing a planned
service acquisition including the existing or planned management
approach for contract tracking and oversight, and tracking procedures or
processes used to monitor contractor performance for the proposed
services acquisition.
(a)(1)(A)(iv) contract tracking and oversight;
DOD Instruction 5000.02 Enclosure 9, “Acquisition of Services,” also
requires that DOD officials collect service contract data. Officials told us
such data is compiled through use of the Federal Procurement Data
System-Next Generation (FPDS-NG). USD(AT&L) officials stated that
they are taking steps to obtain better service contact budget and
expenditure data, in part, due to limitations with FPDS-NG. For example,
FPDS-NG data lists a single Product and Service Code, the predominant
one purchased, for each contract action rather than detailed information
b
on each type of service purchased under the contract. To improve data
on service acquisition, in November 2010, DPAP directed the military
departments to organize services spending data into six portfolio groups,
which were later increased to nine. USD(AT&L) classified nearly 3,000
different Product and Service Codes within its nine portfolio groups, in
part, to enhance its ability to analyze service contract spending and
support strategic sourcing initiatives. Additionally, in January 2013,
USD(AT&L) began an effort to improve its ability to track service contract
budget requests, obligations, and expenditures by requiring the military
departments to include Product and Service Code line-item data in both
acquisition and financial data systems. USD(AT&L) expects that DOD’s
data systems will have this capability by October 2013.
In response to other legislative requirements, DOD components, including
the military departments, compile annual inventories of activities
c
performed on their behalf by contractors under contracts for services.
The legislation requires DOD to annually compile and review an inventory
of activities performed pursuant to contracts to help provide better insights
into the number of contractor full-time equivalents providing services to
DOD and the functions they are performing. To date, DOD has submitted
annual inventories of contracted services for fiscal years 2007 through
2011. GAO, however, has found that DOD inventories have significant
limitations and do not accurately reflect the number of contractors
d
providing services to DOD. In response to GAO’s recommendations,
DOD has identified a number of actions it is taking to more accurately
reflect the number of contactors providing services to DOD.
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services,” in December 2008. This instruction requires that senior officials
or their designees consider various elements in reviewing a planned
service acquisition including the plan for evaluating whether the metrics
and any other measures identified to guide the acquisition have been
achieved; measures shall include the thresholds for cost, schedule, and
performance for the acquisition.
(a)(1)(A)(v) performance evaluation; and
In response to other legislative requirements, USD(AT&L) implemented
independent management reviews, commonly referred to as peer reviews,
e
of contracts for services. Peer reviews are conducted by teams
composed of senior contracting officials from the military departments and
defense agencies as well as legal advisors that are not associated with
the service acquisition. Part of the review includes an evaluation of
whether the contractor met cost, schedule, and performance
requirements. DPAP is responsible for conducting pre- and post-award
peer reviews for services acquisitions with an estimated value of $1 billion
or more and the military departments, defense agencies, and field
activities are responsible for conducting similar reviews for service
acquisition under that threshold.
DOD issued its “Guidebook for the Acquisition of Services” in July 2011 to
provide guidance for developing contract performance objectives and
metrics, and a methodology for assessing contractor performance. For
example, it provides the steps DOD officials should take to develop a
quality assurance surveillance plan and ensure that a contracting officer’s
representative (COR) is appointed and trained to implement that plan.
DOD issued its “DOD COR Handbook” in March 2012 to provide guidance
on the roles and responsibilities of CORs. For example, it provides CORs
with guidance on how to perform effective contract quality surveillance as
well as supplemental information on COR training requirements.
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services,” in December 2008. This instruction requires that senior officials
or their designees consider various elements in reviewing a planned
service acquisition including whether the proposed service acquisition
includes an assessment of the current and potential technical, cost,
schedule, and performance risks and a plan for mitigating or retiring those
risks.
(a)(1)(A)(vi) risk management;
DOD issued its “Guidebook for the Acquisition of Services” in July 2011 to
provide guidance on how to identify, assess, and mitigate cost, schedule,
and performance risks.
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
(a)(1)(B) USD(AT&L) shall work with the service acquisition executives and other appropriate officials of the DOD (a)(1)(B)(i) to identify the critical skills and competencies
needed to carry out the procurement of contract services
on behalf of DOD;
In August 2012, USD(AT&L) established an Acquisition of Services
Functional Integrated Product Team (Services FIPT), chaired by the
director of DPAP, to identify the critical skills, competencies, and training
DOD that personnel with service acquisition responsibilities need.
According to USD(AT&L) officials, the team has met once since it was
established and has not yet determined what these skills and
competencies might be. While USD(AT&L) does not have a timeframe
for making such decisions, it expects to make more progress in 2013
when the Principal Deputy Under Secretary of Defense for Acquisition,
Technology, and Logistics assumes leadership over the team.
(a)(1)(B)(ii) to develop a comprehensive strategy for
recruiting, training, and deploying employees to meet the
requirements for such skills and competencies; and
USD(AT&L) established the Services FIPT, in part, to identify personnel
with service acquisition responsibilities, the critical skills those personnel
need to complete their responsibilities and improve service acquisitions,
and support a human capital strategy. USD(AT&L) officials explained, as
discussed above, that the Services FIPT has not yet developed a
comprehensive strategy for recruiting, training, and deploying employees
with services acquisition responsibilities.
(a)(1)(B)(iii) to ensure that the military departments and
Defense agencies have staff and administrative support
that are adequate to effectively perform their duties under
this section;
USD(AT&L) issued its April 2013 memorandum “Implementation
Directive for Better Buying Power 2.0—Achieving Greater Efficiency and
Productivity in Defense Spending.” The memorandum identifies a
number of actions DOD is taking to improve the professionalism of the
total acquisition workforce. These include: (1) establishing higher
standards for key leadership positions; (2) establishing increased
professional qualification requirements for all acquisition specialties; (3)
increasing the recognition and support of excellence in acquisition
management; and (4) continuing to increase the cost consciousness of
the acquisition workforce. However, the memorandum does not include
details on how USD(AT&L) has ensured that the military departments
and Defense agencies have staff and administrative support to
effectively perform their duties related to the acquisition of services.
USD(AT&L) did not identify additional actions to address this
requirement.
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
(a)(1)(C) USD(AT&L) shall establish contract services
acquisition categories, based on dollar thresholds, for the
purpose of establishing the level of review, decision
authority, and applicable procedures in such categories.
USD(AT&L) issued its October 2006 memorandum, “Acquisitions of
Services Policy,” in part, to address the requirement to establish a
management structure and service acquisition approval process. The
policy requires that USD(AT&L) review all proposed service acquisitions
valued at over $1 billion or any classified as “special interest.” The policy
further directed the military departments to issue guidance implementing
the policy. USD(AT&L) later implemented pre and post-award peer
reviews of services acquisitions in a 2008 policy memorandum
responding to requirements in the NDAA for Fiscal Year 2008. While the
2006 and 2008 policy memoranda identified what officials were to
consider when reviewing service acquisitions, DPAP issued additional
guidance in February 2009. This 2009 guidance establishes key services
acquisition tenets including use of a comprehensive acquisition strategy,
appropriate contract type, maximum competition, and objective criteria to
measure performance. The guidance provides that acquisition strategy
reviews and peer reviews will include the extent to which these tenets
are demonstrated.
(a)(1)(D) USD(AT&L) shall oversee the implementation of
the requirements of this section and the policies,
procedures, and best practices guidelines established and
developed in response to this section pursuant to
subparagraph (A).
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services” in December 2008. This instruction requires that senior officials
or their designees consider various elements in reviewing a planned
service acquisition including whether the proposed service acquisition
addresses requirements for acquisition planning, requirements
development and management, solicitation and contract award, contract
tracking and oversight, performance evaluation, and risk management.
The peer review process, which USD(AT&L) also cited as an action to
address (a)(1)(A)(v) of this section, is a mechanism to oversee the
implementation of the policies, procedures, and best practices guidelines
established in response to subparagraph (A).
USD(AT&L)’s Services FIPT is part of its efforts to oversee the
implementation of the requirements of the policies, procedures, and best
practices guidelines established in response to subparagraph (A).
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
(b) Duties and responsibilities of senior officials responsible for the management of acquisition of contract services (b)(1) Except as provided in paragraph 2, the senior
officials responsible for the management of acquisition of
contract services shall assign responsibility for the review
and approval of procurements in each contract services
acquisition category established under subsection (a)(1)(C)
to specific DOD officials, subject to the direction,
supervision, and oversight of such senior officials.
f
While the USD(AT&L) is the senior official responsible for the
management of acquisition of contract services for and on behalf of the
defense agencies and other components outside the military
departments, USD(AT&L) assigned the Principal Deputy Under
Secretary of Defense for Acquisition, Technology, and Logistics as
DOD’s senior manager for service acquisition, responsible for policy,
training, and oversight across DOD. Officials stated, however, that
specific roles and responsibilities with respect to service acquisition are
still being defined. USD(AT&L) officials stated that they have selected
the individual who will assume this position, but cannot proceed until a
DOD hiring freeze is lifted. The military departments established similar
positions between 2010 and 2012, known as senior services managers,
at the direction of USD(AT&L). These managers are responsible for the
governance in planning, execution, strategic sourcing, and management
of service contracts.
Each of the military departments developed a management structure and
acquisition strategy review policy to compliment USD(AT&L)’s 2006
policy. For each military department, the service acquisition executive is
responsible for the overall management and acquisition of contract
services. The military departments’ policies identify contract service
acquisition categories and approval responsibilities based, in part, on
dollar thresholds. The policies generally require that service acquisitions
valued over $1 billion, unless indentified as “special interest,” be referred
to USD(AT&L) for review and approval. However, for service acquisitions
under $1 billion, the thresholds and review responsibilities differ by each
military department. For example
•
The Air Force requires that any service acquisition valued
between $100 million and $1 billion be referred to the Air Force
Program Executive Office for Combat and Mission Support.
•
Navy officials stated that any service acquisition valued between
$100 million and $1 billion be referred to Deputy Assistant
Secretary of the Navy for Acquisitions.
•
The Army requires that service acquisitions valued between
$500 million and $1 billion be referred to Deputy Assistant
Secretary of the Army for Procurement.
•
While the military departments’ senior services managers also
support the review of these large dollar services acquisitions,
they are also the decision authority for service acquisitions
valued at $250 million or less, but can delegate that
responsibility.
The military departments delegate decision authority for certain lower
dollar services acquisitions to other officials such as the head of
contracting authority or base commanders. These authorities are
delegated for service acquisitions valued as low as the simplified
acquisition threshold, as required by USD(AT&L).
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
(b)(2) With respect to the acquisition of contract services by
a component or command of DOD the primary mission of
which is the acquisition of products and services, such
acquisitions shall be conducted in accordance with policies,
procedures, and best practices guidelines developed and
maintained by the USD(AT&L) pursuant to subsection
(a)(1), subject to oversight by the senior officials referred to
in paragraph (1).
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services,” in December 2008. This instruction requires that all
acquisitions of services shall comply with applicable statutes,
regulations, policies, and other requirements, whether the services are
acquired by or on behalf of DOD.
The military departments’ service acquisition review processes, oversight
by the senior services managers, and other policies or instructions
ensure that service acquisitions comply with USD(AT&L) policies,
procedures and best practice guidelines.
For example
•
The Army’s senior services manager conducts an annual
forecast of contract services, assesses costs savings quarterly,
reviews service acquisition strategies valued between
$10 million and $250 million, and annually reviews command
processes for awarding service contracts.
•
The Navy revises the Navy Marine Corps Acquisition Regulation
to incorporate service acquisition policy information where
appropriate, annually reviews command procedures for
awarding services contracts, and requires that individuals who
award contracts ensure compliance with both Navy and
USD(AT&L) policies, procedures, and best practices.
•
The Air Force policies governing service acquisitions require
similar compliance. The Air Force also noted that its senior
services manager is developing additional instructions to
strengthen requirements to increase compliance with
USD(AT&L) and other policies, procedures, and best practices.
(b)(3) In carrying out paragraph (1), each senior official responsible for the management of acquisition of contract services shall
(b)(3)(A) implement the requirements of this section and
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
the policies, procedures, and best practices guidelines
Services,” in December 2008. This instruction requires that all
developed by the USD(AT&L) pursuant to subsection
acquisitions of services shall comply with applicable statutes,
(a)(1)(A);
regulations, policies, and other requirements, whether the services are
acquired by or on behalf of DOD.
The military departments’ management structure and service acquisition
review process, reviews of command procedures for awarding services
acquisitions, and various policies and procedures implement the
requirements of this section, as well as the policies, procedures, and
best practices guidelines developed by USD(AT&L) pursuant to section
(a)(1)(A).
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
(b)(3)(B) authorize the procurement of contract services
through contracts entered into by agencies outside DOD in
appropriate circumstances, in accordance with the
requirements of section 854 of the Ronald W. Reagan
NDAA for Fiscal Year 2005 (10 U.S.C. § 2304 note),
section 814 of the Strom Thurmond NDAA for Fiscal Year
1999 (31 U.S.C. § 1535 note), and the regulations
implementing such sections;
Defense Federal Acquisition Regulation Supplement subpart 217.78 and
part 242.002 provide DOD policy on contracts or delivery orders issued
by a non-DOD agency, and interagency agreements. Each of the military
departments has also issued policies or procedures for procuring
services through interagency agreements. For example
•
Subpart 5117.78 of the Army Federal Acquisition Regulation
Supplement provides Army policy and procedures for contracts
awarded by other entities,
•
Subpart 5217.5 of the Navy Marine Corps Acquisition Regulation
Supplement provides Navy policy and procedures for
interagency agreements, and
•
Air Force Instruction 65-116 and Mandatory Procedure 5317.5
provides Air Force policy and procedures for entering into
interagency agreements.
(b)(3)(C) dedicate full-time commodity managers to
coordinate the procurement of key categories of services;
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of
Services” in December 2008. This instruction requires that the senior
officials dedicate commodity managers to coordinate the procurement of
key categories of services. All of the military departments reported that
they began to assign such commodity managers in 2012. The
commodity managers we met with explained that their roles include
providing procurement advice to commands within their military
department, tracking service contract spending and forecasting data, and
assisting in the evaluation of individual service acquisitions and
command procedures for developing, awarding, and managing service
acquisitions. Officials noted that these managers are sometimes
responsible for the coordination of more than one service portfolio group.
USD(AT&L) officials stated that by July 1, 2013, they will establish
commodity managers within their office to support service acquisition
across DOD. These officials also stated that the roles and responsibilities
of commodity managers across DOD will be further defined in the DOD
instruction that will replace Enclosure 9 of DOD Instruction 5000.02 in
2014.
(b)(3)(D) ensure that contract services are procured by
means of procurement action that are in the best interests
of DOD and are entered into and managed in compliance
with applicable laws, regulations, directives, and
requirements;
USD(AT&L) and the military departments’ management structure and
service acquisition review process in combination with a number of
policies ensure that contract services are procured in the best interest of
the DOD and comply with applicable laws, regulations, directives, and
requirements.
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Appendix I: Department of Defense Actions to
Implement Requirements in 10 U.S.C. § 2330
Actions indentified by USD(AT&L) or the military departments to
address requirements
10 U.S.C. § 2330 requirements
(b)(3)(E) ensure that competitive procedures and
performance-based contracting are used to the maximum
extent practicable for the procurement of contract services;
and
USD(AT&L) issued its October 2006 memorandum “Acquisition of
Services Policy” and December 2008 DOD Instruction 5000.02
Enclosure 9, “Acquisition of Services,” to require that senior officials
ensure that services acquisitions are based on clear, performance-based
requirements and that cost, schedule, and performance outcomes are
identifiable and measurable.
USD(AT&L) issued its April 2013 memorandum “Implementation of
Better Buying Power 2.0—Achieving Greater Efficiency and Productivity
in Defense Spending.” Within the memorandum, USD(AT&L)
emphasized the need to promote effective competitive procedures
across DOD. The memorandum includes a number of actions
USD(AT&L) has planned to promote competition, including providing
more opportunities for small business participation.
The military departments’ management structure and services
acquisition review processes, various policies, and reviews of command
process for awarding contracts ensure that competitive procedures and
performance-based contracting are used to the maximum extent
practicable.
(b)(3)(F) monitor data collection under section 2330a of this
title, and periodically conduct spending analyses, to ensure
that funds expended for the procurement of contract
services are being expended in the most rational and
economic manner practicable.
In response to other legislative requirements, DOD components, including
the military departments, compile annual inventories of activities performed
g
on their behalf by contractors under contracts for services. The legislation
requires DOD to annually compile and review an inventory of activities
performed pursuant to contracts to help provide better insights into the
number of contractor full-time equivalents providing services to DOD and
the functions they are performing. To date, DOD has submitted annual
inventories of contracted services for fiscal years 2007 through 2011.
GAO, however, has found that DOD inventories have significant limitations
and do not accurately reflect the number of contractors providing services
h
to DOD. In response to GAO’s recommendations, DOD has identified a
number of actions it is taking to more accurately reflect the number of
contactors providing services to DOD.
Each of the military departments also identified that their senior services
managers conduct service contract spending analyses that are either in
support of or in addition to its inventory of activities performed by contractors.
Source: GAO analysis of DOD data.
a
Ike Skelton National Defense Authorization Act for Fiscal Year 2011, Pub. L. No. 111-383, § 863.
b
Product and Service Codes are used within FPDS-NG to identify and classify the services, supplies,
and equipment purchased under a contract.
c
National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 807.
d
GAO, Defense Acquisitions: Continued Management Attention Needed to Enhance Use and Review
of DOD’s Inventory of Contracted Services, GAO-13-491 (Washington, D.C.: May 23, 2013).
e
National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 808.
f
10 U.S.C. § 2330(a)(2) and (3) provide that the senior official responsible for the management of
acquisition of contract services is the service acquisition executive with respect to the military
departments and USD(AT&L) with respect to the defense agencies and other components of DOD.
g
National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 807.
h
GAO-13-491.
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GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807
of the National Defense Authorization Act for
Fiscal Year 2012
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Section 802 of the National Defense Authorization Act (NDAA) for Fiscal
Year 2010 8 required the Under Secretary of Defense for Acquisition,
Technology, and Logistics (USD(AT&L)) to direct the Defense Science
Board (DSB) to independently assess improvements to the Department of
Defense’s (DOD) acquisition and oversight of services. 9 The resulting
March 2011 DSB report, “Improvements to Services Contracting,”
contained 20 recommendations aimed at improving DOD’s contracting for
services. These recommendations focused on developing new policies
and processes to strengthen management and oversight of services
contracting, designating roles and leadership responsibilities, and
strengthening the skills and capabilities of personnel involved in services
contracting, including those in contingency environments. Subsequently,
section 807 of the NDAA for Fiscal Year 2012 required USD(AT&L) to
develop a plan, by June 28, 2012, to implement the DSB
recommendations. 10 The plan was to address, to the extent USD(AT&L)
deemed appropriate, eight different elements most of which align with the
DSB recommendations.
USD(AT&L) officials told us they did not develop a specific plan to
address the section 807 requirement, but that the April 2013 Better
Buying Power Initiative memorandum addresses seven of the eight
elements. In reviewing the memorandum, we also found that it reflects
actions to address all of the elements except the one pertaining to training
and exercises during contingency operations. USD(AT&L) also identified
23 different actions it has taken or plans to take that officials regard as
addressing all of the elements the plan was to include, a number which
pre-date the April 2013 Better Buying Power Initiative memorandum.
8
Pub. L. No. 111-84, § 802 (2009).
9
The DSB is a federal advisory committee established to provide independent advice and
recommendations on science, technology, manufacturing, acquisition process, and other
matters of special interest to the Secretary of Defense.
10
Pub. L. No. 112-81, § 807 (2011).
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GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Table 4 provides a summary of the actions USD(AT&L) reported as
addressing each of the eight section 807 elements. To determine if
USD(AT&L) has taken or planned actions to address the elements in
section 807, we collected USD(AT&L)’s self-reported information using a
data collection template, corroborated reported actions with related
documentation when available, and conducted interviews with
knowledgeable USD(AT&L), military department, and Defense Acquisition
University officials to clarify responses. We did not evaluate the
appropriateness or sufficiency of any actions taken or planned by
USD(AT&L).
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GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Table 4: Summary of USD(AT&L)-Identified Actions that Address Elements of Section 807 of the NDAA for Fiscal Year 2012
Element of section 807 of the
NDAA for Fiscal Year 2012
Actions identified by USD(AT&L)
1. Meaningful incentives to
services contractors for high
performance at low cost,
consistent with the objectives
of the Better Buying Power
Initiative established by the
Under Secretary.
Note: Text in italics explains
Better Buying Power Initiative
objectives.
USD(AT&L) established its Better Buying Power Initiative in September 2010 with its memorandum,
“Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense
Spending.” One of the Better Buying Power Initiative focus areas is “incentivize productivity and
innovation in industry.” The area includes five principle actions that focus on the tie between profit
and performance, contract type justification, the use of progress payments, a preferred supplier
program, and independent research and development.
USD(AT&L)’s October 2006 “Acquisitions of Services Policy” memorandum established its process
for reviewing and approving service acquisitions and requires senior officials or their designees to
a
consider various elements in reviewing a service acquisition strategy. USD(AT&L) issued additional
guidance in February 2009 that established key services acquisition tenets and required that
acquisition strategy reviews document the extent to which these key tenets are demonstrated. One of
these tenets is that the service acquisitions include objective incentives, whenever possible. The
guidance also provides instruction for how reviewers are to assess the use of such incentives.
In December 2012, USD(AT&L) required that DOD personnel developing service acquisitions with an
estimated value of $1 billion or more participate in Defense Acquisition University’s (DAU) Services
Acquisition Workshop. The workshop is a four-day, team-based training tailored to individual
proposed service acquisitions to help develop contractor performance incentives. Through the
workshop, DOD personnel use the Acquisition Requirements Roadmap Tool (ARRT) to develop their
service acquisition requirement. This tool is an online resource designed to help acquisition
personnel write performance-based requirements for service acquisitions and draft several pre-award
documents. According to USD(AT&L) officials, the ARRT helps personnel articulate desired service
acquisition outcomes, which helps them to develop contractor performance incentives. USD(AT&L)
officials stated that as leadership within the military departments participate in the Services
Acquisition Workshops and are exposed to the use of the ARRT, the use of this tool will become
institutionalized throughout DOD.
In response to other legislative requirements, USD(AT&L) hosted a public meeting in March 2013 to
obtain the views of experts and interested parties in government and the private sector regarding the
b
profit guidelines in the Defense Federal Acquisition Regulation Supplement. This meeting was to
help USD(AT&L) revise DOD profit policy guidelines and to identify any modifications to such
guidelines that are necessary to ensure an appropriate link between contractor profit and contractor
performance. According to USD(AT&L) officials, any changes to DOD profit policy will affect
contracting incentives.
In April 2013, USD(AT&L) updated the Better Buying Power Initiative with a memorandum entitled,
“Implementation Directive for Better Buying Power 2.0 – Achieving Greater Efficiency and
Productivity in Defense Spending.” USD(AT&L), through this initiative, identified the need for
incentivizing productivity and innovation in industry and government to achieve its goal of greater
efficiency and productivity in defense spending. The memorandum specifies a number of actions
DOD plans to take to improve the use of incentives in its acquisitions, including those for services.
USD(AT&L) officials identified that one of the memorandum’s actions is to provide additional
guidance on the use of incentives by updating the 1969 “DOD and National Aeronautics and Space
c
Administration Incentive Contracting Guide.” According to the memorandum, a draft of the revised
guidance is due by July 1, 2013.
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GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Element of section 807 of the
Actions identified by USD(AT&L)
NDAA for Fiscal Year 2012
2. Improved means of
communication between the
government and the services
contracting industry in the
process of developing
requirements for services
contracts.
USD(AT&L) issued a January 2012 “Vendor Communication Plan,” noting its commitment to
engaging in timely, constructive, and professional information exchanges with the vendor community.
It noted specific actions it would take, including the publication of industry engagement opportunities,
outreach to small businesses, and holding pre-solicitation conferences.
USD(AT&L) issued its April 2012 “Market Research Report Guide for Improving The Tradecraft in
Services Acquisition,” to aid contracting personnel in conducting market research. According to the
guidance, it was developed, in part, to translate DOD’s best practices for conducting and
documenting market research into standard processes and reports. The guidance includes a
template for documenting market research to provide for more effective collection and sharing of
market research across DOD. According to USD(AT&L) officials, the guide helps acquisition
personnel solicit better information when conducting market research and interacting with the
contracting community.
In December 2012, Defense Procurement and Acquisition Policy (DPAP) issued a policy
memorandum requiring that Services Acquisition Workshops be conducted for all service acquisitions
valued at $1 billion or more, noting that this workshop has improved the quality of requirements
documents while increasing the likelihood of competition, and shortening acquisition lead times. In its
April 2013 Better Buying Power Initiative memorandum, USD(AT&L) directed the Director of DPAP
and the senior services managers to assess the effectiveness of the Services Acquisition Workshop
and develop lessons learned and best practices by October 1, 2013. According to USD(AT&L)
officials, improving requirements definition will also promote better communication with the services
contracting industry as contract solicitation documents will more clearly articulate DOD’s needs.
3. Clear guidance for defense
acquisition personnel on the
use of appropriate contract
types for particular categories
of services contracts.
USD(AT&L)’s February 2009 memorandum “Review Criteria for the Acquisition of Services”
established key services acquisition tenets and requires that acquisition strategy reviews include the
extent to which these key tenets are demonstrated. One of these tenets is that service acquisitions
include the appropriate contract type.
USD(AT&L) issued a class deviation from Federal Acquisition Regulation section16.601(d)(1) and
Defense Federal Acquisition Regulation Supplement sections 216.601(d)(i) and (ii), regarding
limitations on the use of labor hour and time and materials contract types in October 2012. The class
deviation adds additional requirements for a determination and finding supporting the use of these
contract types. The class deviation does not, however, direct the usage of certain contract types for
particular categories of services.
In accordance with USD(AT&L)’s April 2013 update to the Better Buying Power Initiative, the Director
of Defense Pricing is developing guidance on the appropriate use of contract types that will include
examples of when to use specific contract types in developing service acquisitions. According to the
April 2013 Better Buying Power Initiative memorandum, this guidance will encourage acquisition
officials to consider the full range of contract types before deciding on an acquisition approach,
although the USD(AT&L) continues to emphasize the use of fixed-price incentive contracts in certain
d
situations. The memorandum further notes that the use of a specific contract type should be
governed by the nature of the work and deliverables being placed on contract.
Page 40
GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Element of section 807 of the
Actions identified by USD(AT&L)
NDAA for Fiscal Year 2012
4. Formal certification and
training requirements for
service acquisition personnel,
consistent with the
requirements of sections 1723
and 1724 of title 10 United
States Code (U.S.C.).
Note: Text in italics explains
sections 1723 and 1724 of title
10, U.S.C.
Section 1723, title 10 U.S.C., requires that the Secretary of Defense establish education, training and
experience requirements for each acquisition position or category of acquisition positions, except, pursuant
to §1733, for critical positions. It also requires, for each career path, that the Secretary of Defense, acting
through USD(AT&L), establish requirements for completion of course work and on-the-job training and
demonstration of qualifications. Section 1724, title 10 U.S.C., provides that the Secretary of Defense: shall
require completion of courses, two years of experience in a contracting position, and a baccalaureate
degree to qualify for a contracting officer position, with authority to award or administer contracts for
amounts above the simplified acquisition threshold; shall require a baccalaureate to qualify for a GS-1102
position and similar military position; may establish developmental programs; and shall establish
qualifications for the contingency contracting force.
In August 2012, USD(AT&L) established an Acquisition of Services Functional Integrated Product
Team (Services FIPT), currently chaired by the Director of DPAP, to determine the certification and
training requirements for DOD’s acquisition personnel. The Services FIPT is responsible for
identifying the critical skills, competencies, and training DOD personnel with service acquisition
responsibilities need. According to USD(AT&L) officials, while the team has met once since it was
established, it has not yet determined formal certification and training requirements related to
services acquisitions. USD(AT&L) officials could not provide a timeline for when the Services FIPT
may fully address such requirements, but officials stated they are gathering information needed to
make their decisions. Further, in April 2013, USD(AT&L) updated the Better Buying Power Initiative
and identified the Services FIPT as a means to develop training solutions that address the needs of
those responsible for managing service acquisitions.
USD(AT&L) officials explained that DOD’s acquisition workforce includes individuals who buy both
products and services and they have no current plans to develop a separate career path for
personnel acquiring services. According to USD(AT&L) officials, senior officials responsible for
service acquisitions across DOD are planning to meet with the Services FIPT to discuss what policies
and guidance may be needed for acquisition career development in fiscal years 2014 through 2018.
While USD(AT&L) has not determined specific training requirements for personnel acquiring services,
the Defense Acquisition University (DAU) has developed a number of different service acquisitionrelated classroom courses and online training materials and guidance that are open to all DOD
personnel. In addition, DAU provides online resources for personnel conducting service acquisitions,
such as the ARRT.
Page 41
GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Element of section 807 of the
Actions identified by USD(AT&L)
NDAA for Fiscal Year 2012
5. Appropriate emphasis on
the recruiting and training of
services acquisition personnel,
consistent with the strategic
workforce plan developed
pursuant to section 115b of
title 10 U.S.C. and the funds
available through the
Department of Defense
Acquisition Workforce
Development Fund (DAWDF),
established pursuant to section
1705 of title 10, U.S.C.
Note: Text in italics explains
sections 115b and 1705 of title
10, U.S.C.
Section 115b, title 10, U.S.C., requires the Secretary of Defense to submit a strategic workforce plan
in every even-numbered year to shape and improve DOD’s civilian workforce. The Under Secretary
of Defense for Personnel & Readiness shall have overall responsibility for developing and
e
implementing the strategic workforce plan in consultation with USD(AT&L). Section 1705, title 10,
U.S.C., requires the Secretary of Defense to establish DAWDF to provide funds, in addition to other
funds that may be available, for the recruitment, training, and retention of acquisition personnel. This
section establishes rules concerning the use and transfer of DAWDF funds and identifies
USD(AT&L), acting through the senior official designated to manage the fund, as the source of
f
guidance for the administration of the fund.
In August 2012, USD(AT&L) established its Services FIPT to determine the training and recruitment
requirements for DOD service acquisition personnel. The August 2012 charter outlining the Service
FIPT roles and responsibilities identified that the team is responsible for identifying the critical skills,
competencies, and training DOD personnel with service acquisition responsibilities need, including
but not limited to acquisition personnel. The charter also identifies recruitment and retention of
service acquisition personnel as an area the Services FIPT is to address. According to USD(AT&L)
officials, the team has met only once since it was established and has not yet determined how it will
emphasize recruitment and training for personnel with service acquisition responsibilities or how this
effort will be consistent with the strategic workforce plan. USD(AT&L) officials could not provide a
timeline for when the Services FIPT may fully address training and recruitment, but stated they are
gathering information needed to make their decisions. Further, in April 2013, USD(AT&L) updated the
Better Buying Power Initiative and identified the Services FIPT as a means to develop training
solutions that address the needs of those responsible for managing service acquisitions.
USD(AT&L) officials reported they have taken actions to support acquisition personnel and have
worked with DAU to make changes to its acquisition workforce curriculum.
Page 42
GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Element of section 807 of the
Actions identified by USD(AT&L)
NDAA for Fiscal Year 2012
6. Policies and guidance on
career development for service
acquisition personnel,
consistent with the
requirements of section 1722a
and 1722b of title 10 U.S.C.
Note: Text in italics explains
sections 1722a and 1722b of
title 10, U.S.C.
Section 1722a provides that the Secretary of Defense shall require the secretary of each military
department and USD(AT&L) to establish policies and guidance to ensure development, assignment,
g
and employment of members of the armed forces in the acquisition field. Section 1722b provides
that the Secretary of Defense, acting through the USD(AT&L), shall establish policies and guidance
to ensure development, assignment, and employment of civilian members of the acquisition
h
workforce.
In August 2012, USD(AT&L) established its Services FIPT to determine career development
requirements for DOD service acquisition personnel. The August 2012 charter outlining the Services
FIPT roles and responsibilities identified that the team is responsible for providing information,
perspectives, and recommendations to guide decisions on career development for the service
acquisition workforce. USD(AT&L) officials explained that DOD’s acquisition workforce includes
individuals who buy both products and services and they have no plans to develop a separate career
path for personnel acquiring services.
According to USD(AT&L) officials, senior managers responsible for service acquisition within the
military departments and the Services FIPT are planning to meet to discuss policies and guidance for
acquisition career development, specifically identifying priorities for fiscal years 2014 through 2018.
Officials emphasized that DOD does not distinguish between personnel acquiring services or
systems, and has no plans to establish a separate career path for the acquisition of services.
In April 2013, USD(AT&L) updated the Better Buying Power Initiative with a memorandum entitled,
“Implementation Directive for Better Buying Power 2.0 – Achieving Greater Efficiency and
Productivity in Defense Spending.” USD(AT&L), through this initiative, identified the need for
qualification standards for acquisition personnel in leadership positions for all types of acquisitions,
including services. USD(AT&L) will establish qualification boards to certify DOD acquisition personnel
as qualified for key leadership positions. According to the memorandum, board certification is
expected to be a factor in promotion.
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GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Element of section 807 of the
Actions identified by USD(AT&L)
NDAA for Fiscal Year 2012
7. Actions to ensure that the
military departments dedicate
portfolio-specific commodity
managers to coordinate the
procurement of key categories
of contract services, as
required by section
2330(b)(3)(C) of title 10 U.S.C.
Note: Text in italics explains
section 2330(b)(3)(C) of title 10
U.S.C.
Section 2330(b)(3)(C), title 10 U.S.C., requires that the senior officials responsible for the
management and acquisition of contract services dedicate full-time commodity managers to
i
coordinate the procurement of key categories of services.
USD(AT&L) issued DOD Instruction 5000.02 Enclosure 9, “Acquisition of Services,” in December
2008. This instruction requires senior officials to determine key categories of services for DOD and
j
dedicate full-time commodity mangers to coordinate procurement of these services. The military
departments began to establish commodity manager positions in 2011 to help coordinate the
procurement of services portfolio groups. Army, Navy, and Air Force commodity mangers explained
that their roles include providing procurement advice to commands within their military department,
collection of service contract spending and forecasting data, and assistance in the evaluation of
individual service acquisitions and command procedures for developing, awarding, and managing
service acquisitions. USD(AT&L) officials told us that they anticipate establishing DOD-wide
commodity manager positions within its office, but officials did not have further details or a time frame
for when such positions may be established.
USD(AT&L) issued its September 2010 memorandum “Better Buying Power: Guidance for Obtaining
Greater Efficiency and Productivity in Defense Spending.” The memorandum established six key
categories of spending on services, also known as portfolio groups. USD(AT&L) revised these
portfolios from six to nine in 2012. The nine portfolios are (1) research and development,
(2) knowledge-based, (3) logistics management, (4) electronic and communication, (5) equipment
related, (6) medical, (7) facility related, (8) construction, and (9) transportation services. In its April
2013 memorandum to update the Better Buying Power Initiative, USD(AT&L) required that each
senior services manager, including those within the military departments, appoint commodity
managers for each of these portfolio groups by July 1, 2013.
USD(AT&L) expects to issue a stand-alone instruction in 2014 for service acquisition policy to replace
Enclosure 9 of DOD Instruction 5000.02. Officials stated that the new instruction will include more
specific language on the roles and responsibilities of the commodity managers.
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GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
Element of section 807 of the
Actions identified by USD(AT&L)
NDAA for Fiscal Year 2012
8. Actions to ensure that DOD
conducts realistic exercises
and training that account for
services contracting during
contingency operations, as
required by section 2333(e) of
title 10 U.S.C.
Note: Text in italics explains
section 2333(e) of title 10
U.S.C.
Section 2333(e), title 10 U.S.C., requires that the joint policy for requirements definition, contingency
program management, and contingency contracting required by section 2333(a) provide for training
of military personnel outside the acquisition workforce who are expected to have acquisition
responsibility during combat operations, post-conflict operations, and contingency operations. The
joint policy shall also provide for the incorporation of contractors and contract operations in mission
k
readiness exercises for operations that will include contracting and contractor support.
USD(AT&L)’s Contingency Contracting Handbook, updated in October 2012, provides tools
templates, and training that enable a contingency contracting officer to be effective in any contracting
environment. While the handbook does not provide guidance specifically to military personnel outside
the acquisition workforce, USD(AT&L) officials explained that such personnel use the handbook as a
reference document. In addition, according to USD(AT&L) officials, DOD provides tools to assist nonacquisition personnel in contingency environments, such as the Contingency Acquisition Support
Model for Requirements Generation and the Contingency Contracting Officer’s Representative
Handbook. The Contingency Acquisition Support Model is a web-based application designed to
assist those individuals responsible for initiating contacting requirements in a contingency
environment. The application identifies the documents required to initiate a contract, provides
templates for the documents, and routes the documents to the appropriate reviewers and approvers.
The Contingency Contracting Officer’s Representative Handbook provides guidance for personnel
acting as Contracting Officer’s Representatives in a contingency environment.
DOD plans to conduct a joint mission rehearsal exercise in 2014 that will include training for
contracting during contingency operations. According to a Joint Staff briefing, this exercise
builds on a model the Army Contracting Command established in its “Operation Joint Dawn”
exercises in 2011 and 2012 that provided contingency contracting training to deployable military
and civilian contracting officers. USD(AT&L) officials confirmed that this exercise will include
non-acquisition personnel.
According to USD(AT&L) officials, contingency contracting training is also being integrated into
education provided by the National Defense University and Army Staff College. These officials stated
that non-acquisition personnel would be among the training recipients.
Source: GAO analysis of DOD documents.
a
USD(AT&L) established its 2006 “Acquisition of Services Policy” memorandum to address the requirement
under 10 U.S.C. § 2330 that it develop a management structure for the procurement of contract services.
This policy requires that all proposed service acquisitions with an estimated total value of over $1 billion be
referred to USD(AT&L) and formally reviewed at USD(AT&L)’s discretion. The military departments are
responsible for reviewing acquisitions valued below this threshold. See Appendix II for more information on
USD(AT&L)’s actions to address the requirements of 10 U.S.C. § 2330.
b
National Defense Authorization Act for Fiscal Year 2013, Pub. L. No. 112-239, § 804.
c
Department of Defense and National Aeronautics and Space Administration, Incentive Contracting
Guide, October 1969.
d
A fixed-price incentive contract is a contract that allows for the adjusting of profit and establishing the
final contract price by application of a formula based on the relationship of the total final negotiated
cost to the total target cost. The final price is subject to a price ceiling, negotiated at the outset.
Federal Acquisition Regulation § 16.403.
e
10 U.S.C. § 115b(a).
f
10 U.S.C. § 1705.
g
10 U.S.C. § 1722a(a).
h
10 U.S.C. § 1722b(a).
i
10 U.S.C. § 2330(b)(3)(C).
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GAO-13-634 Defense Acquisitions
Appendix II: Under Secretary of Defense for
Acquisition, Technology, and Logistics
Actions to Address Elements in Section 807 of
the National Defense Authorization Act for
Fiscal Year 2012
j
Department of Defense Instruction 5000.02, Operation of the Defense Acquisition System Encl. 9,
para. 3.e (Dec. 8, 2008).
k
10 U.S.C. § 2333(e).
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GAO-13-634 Defense Acquisitions
Appendix III: Comments from the
Department of Defense
Page 47
GAO-13-634 Defense Acquisitions
Page 48
GAO-13-634 Defense Acquisitions
Appendix IV: GAO Contact and Staff
Acknowledgements
GAO Contact
Timothy J. DiNapoli (202) 512-4841 or dinapolit@gao.gov
Staff Acknowledgments
In addition to the contact name above, the following staff members made
key contributions to this report: Johana R. Ayers; Helena Brink, Burns
Chamberlain Eckert, Danielle Greene, Kristine Hassinger; Justin Jaynes;
and Roxanna Sun.
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